Columbia Law School Center for Climate Change Law: Green vs. Green: Litigation For and Against Solar Power in California

By Laura Mulry, Fellow, Center for Climate Change, Columbia Law School

April 2011 was an eventful month for massive solar projects in California and their unlikely opponent: the desert tortoise. As climate change, overpopulation, and development place ever more plant and animal species at risk of extinction, prominent environmental groups, Native Americans, and local residents have brought a string of lawsuits to stop construction of large solar plants throughout the state in pristine areas, most notably the Mohave Desert, that are showing extreme vulnerabilityto climate change. Courts and federal agencies now face the question whether to allow the deployment of technologies that combat the environmental effects of climate change, but whose mere development in the race to fight climate change will also harm species in their immediate areas.

Solar Gains

Two recent California court decisions from mid-April have resulted in victories for solar developers over local environmental concerns. On April 13, 2011, the Supreme Court of California dismissed two lawsuits against the state's Energy Resources Conservation & Development Commission, an arm of the California Energy Commission (CEC), challenging approvals of a solar development project, called the Calico Solar Project, located on 4,613 acres of federal land in San Bernardino County. The cases, filed last January, were brought by the Sierra Club and the California Unions for Reliable Energy (CURE), who contended the CEC improperly assessed the environmental impacts of the solar project, and that the environmental review neglected to adequately consider the cumulative impacts of the project or the risks associated with desert tortoise translocation. A week later on April 19, San Luis Obispo County officials rejected four appeals seeking to overturn the approval of a SunPower solar plant on the Carrizo Plain. Environmental groups brought the cases over concerns for the impact of the solar project development on rare plant and animal species, specifically the desert tortoise and big-horned sheep (two species of big-horned sheep are endangered species under both federal and California law, and the desert tortoise is threatened under federal law and endangered under California law).

The Calico Solar Project has faced numerous obstacles stifling its progress, including a cancelled power purchase agreement and the struggling developer Tessera Solar selling the project to K Road Power. K Road Power then announced it would convert the plant from concentrating solar power to photovoltaic technology; the CEC then cut the project, from 850 MW to 663.5 MW in order to minimize its impact on plants and animals. Despite the downgrade, the Sierra Club and CURE challenged the approval because they believe the development in general, and the new photovoltaic technology in particular, will have a negative environmental impact. Despite these two case dismissals affording relief to its developers, Calico remains one of four solar projects being sued by a Native America Group, the La Cuna de Aztlán Sacred Sites Protection Circle (see below for details).

In San Luis Obispo, the county's five-member Board of Supervisors voted unanimously to reject four appeals against the approval of the SunPower's 250 MW California Valley Solar Ranch development. The complaints and response largely mirrored those above, with the petitioners, including both local interest groups and the Sierra Club, concerned about the project's impact on threatened and endangered species and project developers highlighting the economic and environmental benefits of their development.

The SunPower California Ranch development would be the largest photovoltaic project to use solar tracking technology; with the rejection of the appeals, developers will begin construction on the plant by the end of August, after SunPower fulfills 148 of the conditions the Board requires (including requirements to mitigate the environmental impacts of the project). The dismissal of the appeals against the project is welcome news not only for the developers, but also for the Department of Energy (DOE), which, a week before the rejection of the appeals, gave SunPower a conditional commitment for a $1.187 billion loan guarantee to fund construction of the plant.

In addition to potentially bolstering the hopes and plans of investors and developers of some 40 solar plants under contract in the state, case dismissals are also a temporary source of relief for the CEC, which found itself facing numerous legal challenges this past year after approving the Calico plant and eight other solar power projects totaling about 4.1 gigawatts (GW) all within 4 months.

The Tortoise Prevails

Not all recent activity in California has been favorable for solar developers. The Bureau of Land Management (BLM) recently ordered BrightSource Energy developers to immediately suspend construction on two-thirds of what would have been the largest solar power facility in the world, the Ivanpah Solar Project located in the Mohave Desert. Following a temporary suspension order by the Department of the Interior on April 15, 2011, the BLM came out with a revised biological assessment on April 28, 2011, which anticipated a much more significant degradation to the desert tortoise population than was initially found in the original biological assessment. In response to this federal order, the U.S. Fish and Wildlife Service must now develop a revised Biological Order and Incidental Take which will dictate how the project developer will relocate desert tortoises under the Endangered Species Act, how it will proceed in order to avoid as much damage as possible to the fragile tortoise population, and whether the continuing of construction will place the species at jeopardy; the biological order could even call for complete suspension of the project.

This action came after the BLM had already reduced the size of the project by 15 percent, from 4,073 acres down to the currently planned 3,471 acres after a public comment process, and required that BrightSource contribute to the joint compensation fund operated by the National Fish and Wildlife Foundation for its negative effects on water and wildlife.

The petitioner here, the Western Watersheds Project, accused the Department of Interior (DOI), the U.S. Fish and Wildlife Service, and the BLM last January of "precipitously approv[ing] unnecessarily destructive energy development of the California Desert Conservation Area without first conducting adequate environmental reviews," to the detriment of 20 rare plant and animal species, including the desert tortoise, desert big-horn sheep, golden eagles, burrowing owl, barrel cactus, and centuries-old Mojave yucca.

The case comes on top of another lawsuit against the project: Ivanpah is one of four solar projects (Calico being another) that have been sued in a still-unresolved challenge by a Native American Group, the La Cuna de Aztlán Sacred Sites Protection Circle (joined by Californians for Renewable Energy, CURE, and individuals). These groups also argue the Ivanpah project will threaten rare plant and animal species; in addition they argue the project sponsors did not adequately consult with Native American groups, and the developments will desecrate Native American cultural resource sites. La Cuna de Aztlán won an injunction against the Imperial Valley Solar Project in December 2010.

Legal challenges burden not only project sponsors such as BrightSource Energy, but also their various investors. Notably, in the past month BrightSource finalized a 1.6 billion-loan guarantee from the DOE under the American Recovery and Reinvestment Act, acquired a subsequent Google investment of 168 million, and, on April 28th, the company filed a 250 million dollar Initial Public Offering, all of which are now in jeopardy.

The Government's Role

Some of the controversy here is a result of the BLM and CEC shoehorning environmental reviews. As described in a previous blogpost, projects were streamlined for approval so that developers could start construction and qualify for a federal stimulus grant set to expire on December 31, 2010, which would cover 30% of developers' costs. The deadline was later extended until December 31, 2011, but litigation over whether these 2010 fast-tracked approvals and permits were adequate under the law has been immense and will likely continue to be so.

The above case dismissals will be seen as crucial boons to the solar industry, which also faces a possible expiration of the DOE loan guarantee program by October, if not earlier. However, the time and money spent on these lawsuits in addition to the stringent (and often fickle) environmental review processes is not insignificant: developers may well run out of money and time to keep fighting. Even the threat of litigation will not be easily forgotten by investors and could likely affect the size and scope of new solar plants going forward.

A Retreat to Private Land?

In a recent article, an editorialist for the Los Angeles Times notes that solar power developers should consider building on private land. Developers initially may have thought building on public land would be optimal because it is cheaper than buying or renting private land. However, as the costs of litigation and habitat mitigation efforts are proving expensive and time-consuming, private land appears to be an advantageous alternative for many reasons: 1) It is often far from being pristine and usually doesn't shelter rare plant or animal species; 2) There are numerous barren lots available due to cancelled residential projects or former agricultural use; 3) Solar projects on private land would not face the roadblock of the National Environmental Policy Act, which on pristine land requires stringent environmental impact statements that can last many years; and 4) Some private land, most notably the Western Mohave Desert is closer to existing population centers such as Lancaster and Victorville, and to existing power transmission lines. A crucial component in choosing land to develop is a plot's proximity to public utilities for transmitting power to these utilities under California's recently signed into law RPS mandate.

Synthesis

While the debate over whether the government and developers could have chosen more appropriate lands for these massive solar projects is still ongoing, the U.S. is lagging behind countries such as Spain, Portugal, South Korea, Germany, and China which are in the process of creating robust solar economies. According to a Bloomberg article, China recently established itself over the U.S. as the most hospitable country for renewable energy projects in the world, and has made a clear policy decision that the benefits of solar power outweigh any damage to plant and animal habitats. Whether that is the viewpoint the U.S. should take appears questionable. One viewpoint was expressed by Solar Done Right member Ceal Smith of the San Luis Valley Renewable Communities Alliance who said, "(t)he Interior Department wants to generate 10 gigawatts of solar on public lands by 2015. It would be faster, cheaper for ratepayers, and would create many more jobs if we focused on massive distributed solar generation in our vast urban landscapes. It makes no sense to bulldoze our valuable, intact and irreplaceable public lands first."